MONTREAL, Canada – Dorel Industries Inc. issued third quarter results and the Canadian company’s holdings in the cycling industry continue to deliver strong performance. Third quarter revenue for Dorel’s Recreation/Leisure division was up 21.6% over the same period last year and 15.9% for the 9 months ending Sept. 30. Total revenues for the division were US$ 209,823 million for the third quarter of 2011 and US$ 659,344 million for the year to date.
Third quarter revenue for the company overall increased by US$ 6.3 million, or 1.1%, to US$ 575.8 million, from US$ 569.5 million a year ago. Net income was US$ 23.1 million compared to US$ 30.6 million in 2010. Total nine month revenue was up US$ 29.2 million (1.6%) to US$ 1.80 billion from US$ 1.77 billion in prior year. Net income was US$ 77.2 million compared to US$ 101.8 million for the year-to-date period in 2010.
Dorel’s Recreational/Leisure division includes the Cannondale, Schwinn, GT, Mongoose, IronHorse, SUGOI, Pacific, Dyno, RoadMaster, PowerLite and InSTEP brands, in three distinct operating divisions. The Cycling Sports Group (CSG) division deals specifically with the Independent Bicycle Dealers (IBD) channel; the Pacific Cycle division deals with mass merchants and sporting goods stores, and the Apparel Footwear Group (AFG) incorporates the SUGOI, Cannondale, GT, Schwinn, IronHorse and Mongoose apparel lines.
According to the company’s press release, strong sales to the independent bicycle dealer (IBD) channel continue, driven by new product innovation and brand support. “In Recreational/Leisure we maintained our momentum as the Cannondale brand becomes increasingly synonymous with product innovation," commented Dorel President and CEO Martin Schwartz.
The segment's organic revenue increase was approximately 18% for the quarter and is 13% year-to-date. Performance in the quarter was hampered by losses at the apparel division, with earnings declining by approximately US$ 2.5 million from last year, mainly due to a write-down of excess inventory from prior model years and one-time costs of $US 800,000 related to the company’s decision to outsource the "custom manufacturing" part of this business. Company executives note that preliminary orders for spring 2012 are higher than a year ago at this time.